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Top Ten Retailer Tidbits
November 20, 2007
Holiday is here and each hour counts.
Here are a few observations on the first tier of the HTT Top 50 Retailing Giants as we look into the crystal ball for year-end results (figures are 2006 home textiles sales):
1. Wal-Mart - $3.640 billion
It took a long time to finally hear this: “We’re seeing improvements in both home and apparel” – but hear it we did, from ceo Lee Scott on the 3Q earnings call. If depressed sales growth in home textiles has bottomed out at the Big W, then maybe Bentonville’s scorched-earth policy on margins and prices will ease just a bit – and that in turn could give other retailers a chance to test higher price points.
On the other hand…
2. JCPenney - $3.065 billion
“Big ticket home” products were a flop in JCP’s 3Q. Store comps hit a wall in September, and the direct side’s internet success was smothered by a clunky catalog season. Management is sour on 4Q – but chairman Ullman talked tough about maintaining the JCP rep as the leading home brand destination for consumers.
3. Bed Bath & Beyond - $3.040 billion
BB&B won the specialty store traffic battle long ago. This chain is a destination – for holiday gifts and home-entertaining implements especially. But less than stellar brand statements make home textiles a question mark.
4. Target - $2.615 billion
Remember how cool those Gap ads were? Gap Inc. hasn’t traded above $24 since June 2003. Target now owns the cool ad crown – and its soft home department is the most exclusively direct-sourced in the business. Last year, Global Bazaar stumbled. This year, that program recovered but now home textiles shoppers are in “down-trade” mode at Target, shunning collection goods for basics. Stay tuned.
5. Kohl’s - $1.100 billion
Loaded with exclusives, Kohl’s finally gets sniffles from the negative-comps flu. Very aggressive re-merchandising of soft home has already helped – but margins are in jeopardy.
6. Kmart - $1.025 billion
One last fling with Martha before the end of the affair? As an encore, the impressive refreshing of MSEveryday has bought Kmart a year to prepare.
7. Linens ’n Things - $993 million
They’ve cleared tons of dead inventory. Now they need merchandise statements to excite the shoppers. Check back in year four of the nine-year turnaround.
8. Macy’s Home Store - $820 million
Macy’s is on track – to ring up $400 million less than last year in total sales. But they are pumping more energy into home goods and marketing than ever before. No big payoff until 2008.
9. TJMaxx/Marshalls - $615 million
It’s a great time – not a good time, a great time – to be in the off-price business.
10. Williams-Sonoma - $595 million
W-S has executed with fairly good consistency across its multi-format store and direct operations. Witness the careful development of West Elm. But it has taken its sweet time making the course-correction at Pottery Barn. Maybe it’s time to get radical: like converting 100 Barns to Elms.
Posted by James Mammarella on November 20, 2007 | Comments (0)
